* SBBs soften negative CEPS revisions * Net acquisitions and continued buybacks on the cards * 2027e P/CEPS 9x vs. coverage average of 14x
ANNONS
Higher net financials behind Q3 miss
Stenhus delivered Q3 net operating income 2% ahead of our forecast, driven by a stronger top-line, while the NOI margin of 83.2% was broadly in line with our expectations. Central administration costs and the IFPM contribution from JVs were largely in line with our expectations while net financials were higher, resulting in rec. PTP 2% below our forecast and 4% below Infront consensus, but these are limited deviations in absolute terms. We lower our CEPS estimates by ~1% for 2027e-2028e on the recently announced net divestments, revised 2027e CPI indexation assumptions and higher funding costs, which is partly counteracted by SBBs.
Expect M&A and continued SBBs in Q4
Net letting amounted to SEK 0.6m, i.e. fairly neutral, while the occupancy rate improved by 60 bps q-o-q to 95.3%, primarily driven by the divestment of a vacant property, while we assess that the underlying change is neutral and that management expects stable occupancy in the near-term.Ahead of the Q3 report, Stenhus announced M&A activity, comprising acquisitions and divestments completed in Q3 and Q4 of 2026, with a net divestment of ~SEK 115m. In terms of capital allocation, management aims to use the proceeds for both M&A and SBBs. The NIY in the recently announced acquisitions reportedly amounts to ~7%, which will remain a target for near-term M&A. The earnings capacity IFPM per share was up 0.4% q-o-q to SEK 1.38, driven primarily by a mix of slightly lower top-line and higher funding costs, offset by SBBs.
2027e P/CEPS 9x vs. sector at 14x
The share is trading at a '2027e P/CEPS of 9x vs. the sector average of 14x, and a P/EPRA NRV of 0.6x compared to the sector average of 0.8x. We forecast average CEPS growth of ~2% in 2027e-2028e vs. the average in our coverage of ~2%, with potential to drive earnings further.
